How Will Supply Chain Planning Be Done in 2021 and Beyond?

2020 has finally come to an end. Throughout the past year, COVID-19 has made supply chain planning and management, already complex enough, even more intricate. During this period, we focused on better planning for sudden fluctuations in our customers’ supply chain demand and improving methods of sourcing materials and products from suppliers.

In this article, we have attempted to discuss predictions regarding groundbreaking developments beyond the pandemic in supply chain planning and management. We believe that reading our blog containing the forecasts and observations made by Dijitalis will be beneficial for you.

Digital Transformation in Supply Chain Management Will Accelerate

We anticipate that digital transformations in supply chains will accelerate in the coming periods, with businesses that have long postponed this transition making it a priority. According to a recent Gartner study, 68% of businesses are investing in digitization for supply chain planning. Given the critical importance of flexibility and speed for supply chain planning, digitalization investments are prioritized in supply chain management.
The COVID outbreak caught many supply chains unprepared for significant changes at remarkable scales. The uncertainties in demands and interruptions in supplies will challenge these businesses to provide good service levels and achieve their goals in the future. It is now understood that disruptions can occur at any moment, and supply chains must also provide speed and flexibility.

The Need for Planning Skills Supporting Supply Chain Resilience Will Increase

According to Gartner, “Winning companies when disruptions occur are those that prepare before disruptions occur and build resilience.” As businesses move past the pandemic impact and adapt to permanent changes in demand and supply, we expect them to optimize distribution networks, improve central planning and simulation capabilities, and become adept at scenario planning. Companies can use these capabilities not only for other purposes but also to assess the impact of changes in supply chain parameters (such as longer delivery times, changes in supplier constraints, and order frequencies) on inventory targets.

Countries Will Localize Their Supply Chains and Focus on Alternative Sources

Optimizing existing supply networks to improve service levels will become increasingly important. Ensuring that suppliers focus on your business to be able to plan consistently forward will require committing to a certain business volume in advance.
Countries will also attempt to localize and shorten their supply chains. Of course, the higher production costs of local manufacturing will be balanced by reduced inventory levels, lower shipping costs, lower customs duties, and taxes. The benefit of more flexibility, predictability, and faster response will be the ability to carry less stock to absorb shocks compared to before.

Best-of-Breed Solutions Will Take Center Stage

With the rise of specialist solutions, we expect companies to prefer best-of-breed software that meets the expected mission rather than meeting needs from a single source like SAP. We anticipate that this trend will increase. As a result, companies will procure advanced planning and digital twin software from different software and consulting providers without concern for integration with SAP modules.

Like COVID Vaccines, 5G Devices Will Also Require a New Distribution Model

5G has started to be used in various countries, and as a result, the distribution of 5G devices and equipment will increase significantly. In the future, 5G will offer many options for horizontal and vertical applications of Industry 4.0. This technology also provides high reliability and low latency for industrial applications using Industry 4.0 technologies. With these features, 5G is also extremely important for the Internet of Things. However, like the distribution of vaccines, nobody is ready for this 5G wave in terms of supply chain management and logistics.
All these trends point to a significant digitization of supply chains and evolution in supply chain planning. To secure your future competitive advantage, you must act now. It’s time to see how much can be accomplished when supply chain management professionals invest in the right digital innovation. We are also ready to help with the future of supply chain planning. Whatever tomorrow brings, with our supply chain optimization and digital twin solutions, we aim to be your critical solution partner for success.